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Nirav Modi fraud: PNB removes two EDs

Nirav Modi fraud: PNB removes two EDs

The government today initiated the process to remove Allahabad Bank CEO Usha Ananthasubramanian and two executive directors of Punjab National Bank in connection with United States dollars 2 billion fraud perpetrated by diamond jeweller Nirav Modi in connivance with PNB officials.

"The Central government's decision to keep away Ananthasubramanian, Managing Director and CEO of Allahabad Bank and the two Executive Directors in PNB from their banks is a welcome decision".

The main accused in the scam - Nirav Modi and his brother Nishal Modi - are absconding.

Indian authorities have arrested at least 20 people in the case and a court has issued non-bailable warrants against accused jewellers Nirav Modi and his uncle Mehul Choksi.

Other names in the charge sheet include PNB executive directors Sanji Saran and Brahmaji Rao, General Manager- Nehal Ahad. Following this, the accused will not be able to seek bail.

The scam, which reportedly began in 2011, was detected in the third week of January this year, after which the PNB officials reported it to the concerned agencies. More than 80 witnesses have been examined. The charge-sheet was filed in a Mumbai court just before the 90-day period to file charges against those arrested ends. They are at large after defrauding PNB of over Rs 14,000 crore using 1,200 illegally secured letters of undertakings (LOUs). They did not record the details on SWIFT interbank messaging system or PNB's own networks and handed demand drafts to Nirav and his firms. The transactions happened without any sanctioned limit or cash margin and without making any entries in the bank's CBS system.

Investigators found that the funds were siphoned off to purported overseas supplier firms that was a set-up by Nirav Modi and his firms. Of the total misappropriated amount, Rs 6,498.2 crore has been attributed to Nirav.

CBI is all set to file its first chargesheet today Usha Ananthasubramaniam, the MD, and CEO of PNB will also be named in the chargesheet, according to sources.

"While we have recovered documents including original applications for seeking loan through LoUs of over 130 of the 144 LoUs mentioned in the first FIR, the charge sheet concentrates only on half-a-dozen LoUs and an equal number of FLCs as we have been able to collect evidence to prove that they were fraudulent", said an official". She was head of the core management team constituted by the Ministry of Finance for coordinating the process of formation of a women-centric bank. Meanwhile, RBI has imposed lending and deposit restrictions on Allahabad Bank given its poor financial health.

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